Eyman’s dangerous spending initiative could pass

Let’s say you made $50,000 in 2008. Then this year, as the recession got worse, you took a pay cut and made only $40,000.

Let’s say things get better in 2010 and you bring in $55,000, but because of a new rule any money you made above and beyond your 2009 salary had to be given back to your boss.

Would you say this new rule put a crimp in your spending? Yes you would, and that, in a nutshell, is what Tim Eyman’s Initiative 1033 would do to cash-strapped city, county and state governments.

Eyman, the professional initiative sponsor from Mukilteo, would object mightily to that characterization. He insists I-1033 is about limiting the amount of money government brings in, not about limiting what it spends. His new measure would limit the growth of city, county and state general fund revenue to what was collected the year before, adjusted for inflation and population growth. Any revenue taken in above that limit would have to be used to reduce property taxes.

Controlling the pie

In a Monday interview Eyman likened government to baking a pie. If I-1033 is approved what taxpayers “can control is how big this pie is going to be, how fast it’s going to grow,” Eyman said. The food analogy is apt, because if his measure gets the OK government will start to starve just when taxpayers are most hungry for its services.

And by setting 2009 as the baseline year for government tax revenue, Eyman’s managed to pick a year when tax revenues are quite low because of the Great Recession. The state faced a $9 billion operating budget deficit this year, and each new revenue forecast has been chopping off hundreds of millions of dollars in anticipated tax revenue.

Eyman’s critics howl that by using 2009 as the base for future tax collections he’s putting government in a hole it won’t easily get out of. (Check out Schmudget, the Washington state Budget & Policy Center blog for a user-friendly guide to these complaints).

And when the economy turns around and tax revenue increases, Eyman’s mandate that tax revenue above a fixed amount go specifically toward property tax relief would prohibit government from putting money back into things like higher education and human services that took big budget hits this year. More worrisome, say Eyman’s detractors, would be the fact that government couldn’t effectively respond to emergencies like a return of swine flu if the spending restraints in I-1033 become law. Eyman bete noire David Goldstein from Horse’sass.org has gone so far as to describe I-1033 as Eyman’s “most vindictive, dangerous and mean-spirited initiative yet.”

Eyman says his critics are wrong to use scare tactics. Government would be able to spend money beyond the limits imposed by his new measure – so long as voters said ‘yes.’

“We’re controlling how much they automatically get, they can get as much as they want if they convince the voters there’s a need for more,” he explained.

He also says his foes are unfairly citing Colorado’s experience with a similar initiative as a reason to reject I-1033. The Centennial State began linking government revenue increases to population growth and inflation in 1992. The effect, some say, was diminished public services.

Eyman says Washington has a different system than Colorado, “where, basically they couldn’t change it – it was unmovable object.” It’s far easier for voters and the Legislature to tweak or change initiatives, and he points to how many time Initiative 601 – spending limit measure approved by voters in 1993 – has been amended.

Eyman is absolutely right that government spending increased too much during the boom years and that has left us dealing with the bust. Government leaders would do well to restrain spending in good times as well as bad. But because Eyman’s latest meaure will likely go to voters at a time when they are feeling the tax pinch during the toughest times most people can remember, it’s very possible the politicians won’t get the chance to do that themselves.